I think the problem is not about having money or not, but about the government's courage and political will to increase the proportion of the defense budget. Even though Indonesia's economic growth in 2023 is expected to fall to 4.8% due to economic turmoil and the normalization of commodity prices at the global level, in 2024 it's expected to increase again to 5.6%. This rate is similar to the last year of SBY's administration.
Indonesia's financial and debt conditions in recent years have been prudent and stable. If we do simple research by googling '
komposisi utang Indonesia 2022' and '
peringkat rating kredit Indonesia 2022', the following indicators will appear:
1. Indonesia's debt to GDP ratio in 2022 is still 39.5%. It's way below regulatory limits, 60%. This ratio is also the smallest when compared to countries with relatively the same credit rating.
2. Until 2022, Indonesia debt is about Rp 7734 trillion (US$ 518 B), its divided almost equally between government and private sectors. Long-term government debt is 99.8%, while long-tenor private debt is about 75%.
3. The government debt structure consists of 89% Government Securities (SBN) and 11% direct loans.
4. Debt in foreign currencies is only 29% (20% in US$, 5% in Euros, and 4% in Yen). About 71% of the debt is in Rupiah, it can be interpreted as domestic debt. Thus, the effect of foreign currencies fluctuations is relatively small on Indonesia's debt conditions. Then, domestic debt illustrates the confidence of the people to finance government programs.
5. In recent years, Indonesia's debt ratings from all global institutions have been in the good and stable category.
So, it's time to knock the president and MoF foreheads to increase political will and defense budget.